Screening Practices of New Business Incubators: The Evaluation of Critical Success Factors

Abstract

New firms are an important mechanism through which new jobs are created. However, the new venture failure rate is greater than the rate of creation. Business incubators have been organized to bring new businesses together to increase the probability of success. Incubators do not guarantee success; however, evaluating potential clients on Critical Success Factors can minimize failures once the firm joins an incubator. This research investigates the screening practices of incubators and identifies unique groups of incubators. The screening practices were found to relate to sponsorship but not to physical characteristics or objectives.

Business incubators and accelerators: a co-citation analysis-based, systematic literature review

“…Mcadam and Marlow (2007), Smilor and Gill (1986) ''A facility with adaptable space which small businesses can lease on flexible terms and reduced rents [where] Support services are available and shared'' Kuratko and LaFollette (1987) ''Large buildings operated to nurture young companies by providing low-rent space, shared office services and management advice'' Lumpkin and Ireland (1988) ''Centralized physical facilities that 'incubate' new and small ventures by providing them with varying support services and other assistance.'' Udell (1990) ''Are multi-tenant buildings providing affordable, flexible space, and a variety of office and support services which share a common purpose: to nurture small fledgling firms into healthy businesses'' Weinberg et al (1991) ''Locally based institutions that provide shared physical space and business support services to new and young firms'' Markley and McNamara (1995) ''[Organizations that] offer fledgling companies a number of benefits-office space, funding, and basic services such as recruiting, accounting, and legal-usually in exchange for equity stakes''…”

“…Beyond these criteria, however, corporate incubators consider strategic alignment between their startup portfolio and their parent company as a relevant selection criterion, which is often more relevant than expected immediate financial returns. Lumpkin and Ireland (1988) identify three groups of screening criteria, which include the experience of the management team, financial strength as well as market and personal factors. Using this study as a basis, Aerts et al (2007) describe the screening practices of European business incubators.…”

Uwarunkowania skuteczności działania inkubatorów przedsiębiorczości

“…Z pojęciem preinkubacji jest ściśle skorelowany mechanizm selekcji potencjalnych przedsiębiorców oraz ich pomysłów 124 . Problem ten jest istotny z punktu widzenia efektywnej alokacji zasobów zarówno z perspektywy poszczególnych inkubatorów, jak i gospodarki 125 . Wybór potencjalnie inkubowanych podmiotów gospodarczych jest procesem złożonym i w uproszczeniu polega na zidentyfikowaniu najbardziej perspektywicznych przedsięwzięć 126 .…”

Création d’emplois ou création de connaissances, quelle mesure de performance pour l’incubateur ? L’influence des caractéristiques des projets sélectionnés dans le processus d’incubation

“…Il faut noter que la frontière entre ces choix stratégiques est parfois perméable. Mian (1996) et Lumpkin et Ireland (1988) indiquent que l'application des critères de sélection fluctue selon le taux de remplissage des incubateurs, l'importance donnée à celui-ci et les pressions politiques qu'ils subissent. D'autres raisons peuvent mener au changement des logiques de sélection.…”